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Improving Economic Forecast Calls for Medicaid to Be Left Alone

Is it raining in Texas today? Will it be tomorrow?

The sunshine of a seemingly endless summer may well be an optical illusion. For months, Texas’ financial skies have been turning gray and it’s now pouring to the tune of between $10 to $18 billion in projected state revenue shortfalls.

There are many demands and not enough money. The state budget will be job number one for the Texas Legislature when it meets in just a few short months.

AARP is asking our state leaders to carefully evaluate all options and make decisions that are humane and make long-term economic sense for Texas. We know that the key categories of state spending – health care, social services, education and public safety – will all have bull’s-eyes on their backs.

Of particular note for seniors, is the Medicaid program. Medicaid is a major source of help with the cost of long-term care services. Is messing with these services the right approach to alleviating the state’s fiscal woes? Far to the contrary.

Any one of us is just one bad day away from having a disability or from placing an elderly relative in a nursing home and depleting our life savings in a matter of months. There are countless scenarios in which a hardworking Texan suddenly finds that help from Medicaid is the only viable answer.

Medicaid is, in essence, long-term care insurance for the middle class. With the average stay in a Texas nursing home costing around $60,000 it doesn’t take long for the average middle class family to exhaust their savings on long-term care needs. For those who have exhausted their resources, Medicaid is the only safety net.

Medicaid is a good financial deal for the state of Texas. For every state dollar spent on Medicaid, the federal government contributes $1.47. This money helps stimulate the Texas economy well beyond the benefits the seniors receive from the services and the payment received by service providers.

Although the financial situation sounds bad, there are reasons to be optimistic. Sales tax revenues are trending in the right direction, and the Texas economy continues to be among the strongest in the country, with the lowest unemployment rate of the largest 10 states. Our state comptroller and leading economists believe the economy will be in better shape by the time the Legislature must make budget decisions for 2012 and 2013. Let’s not overreact by slashing critical human services programs that save the state money and bring us federal dollars.

AARP supports a balanced and responsible approach to reducing the state’s deficit. But there is a right way and a wrong way to do this. With a budget shortfall of this magnitude, lawmakers have a duty to consider all options, including tapping into the state’s Rainy Day Fund, which accumulates cash during times of economic boom times to help balance budgets in times like this.

Yes it’s pouring now. But as the old Texas saying goes, “If you don't like the weather today, just stick around. It will change.”

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